click to show more information

click to hide/show information About this Show

Your Money

News/Business. Ali Velshi. CNN anchors break down the financial news of the week. New.

NETWORK
CNN

DURATION
01:00:00

RATING

SCANNED IN
San Francisco, CA, USA

SOURCE
Comcast Cable

TUNER
Virtual Ch. 759 (CNN HD)

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
1920

PIXEL HEIGHT
1080

TOPIC FREQUENCY

Washington 13, U.s. 6, Ken 6, Grover Norquist 4, America 4, Europe 4, Cole 3, Warfarin 3, Obama 3, United States 2, Nyse Euronext 2, Us 2, Boehner 2, Grover 2, Virginia 2, Bob 2, Malibu 2, Selsun 1, Steven Moore 1, Manchester United 1,
Borrow a DVD
of this show
  CNN    Your Money    News/Business. Ali Velshi. CNN anchors  
   break down the financial news of the week. New.  

    December 9, 2012
    12:00 - 12:59pm PST  

12:00pm
details of his 1997 death. i'll be back in one hour. the game of political chicken over the fiscal cliff is still being played in washington. why congress emptied out this weekend with no deal in hand. plus, what are the most intriguing images of 2012? from the disturbing to the hilarious, we'll look at the year that was. year that was. "your $$$$$" starts right now. -- captions by vitac -- www.vitac.com congratulations, washington, you achieved nothing this week. this is "your $$$$$." last week, president obama's offer to avoid the fiscal cliff was laughed at by republicans. this week, the gop countererred. extend the bush tax cuts to everyone, including the rich. revenue, cost savings, cutting, whatever you want to call it from vague areas such as closing, special interest loopholes and deductions, savings from health care and cuts in discretionary spending. other than that, no specifics. president obama wasn't feeling
12:01pm
it. he said the gop must agree to one thing to get anywhere close do a deal. >>. >> wee going to have to see the rates on the top 2% go up and we're not going to be able to get a deal without it. >> speaker boehner fired back. >> this week, we made a good faith offer to avert the fiscal crisis. now, we need a response from the white house. we can't sit here and negotiate with ourselves. >> so, here we are, just over three weeks from going over the fiscal cliff. you're probably getting a lot of stuff around the house this weekend wondering what the heck is going on in these houses in washington. this is the worst of american politics. they put themselves and their political games first and put your future and prosperity second, but hey, you voted them into office. remember what happened the last time washington got into a budget battle like this? lawmakers put a band-aid on the problem and the u.s. lost its aaa crediting rating. i've warned you over and over about the economic storm headed
12:02pm
our way partly because of europe and this fiscal lif, but i've also told you about an american economic renaissance that could be just ahead. just beyond the storm clouds. the fiscal cliff is fixable, but every day washington fails to make a deal, more damage is being doing. john king, ken rogoff and diane swan, chief economist at mezaro financial. john, right now, this is more politics than the economy. some people are saying don't sweat it. the threat of going over the fiscal cliff is overblown. it will get done. an 11th hour deal. john, as you read the politics at play, what do you see? >> i see both sides digging in. you've just played the president saying i want that rate hike. the republicans are saying mr. president, we'll give you the revenues, but not through a rate hike, but the president believes he won the election and he's upped the ante. says he wants twice as much in
12:03pm
tax revenues than a year and a half ago, so the president believes he has the higher ground. i think maybe the democrats have a deeper trench, if you will. they have public on their side. but if you talk to people in washington, there's still this sense that at a last minute, reason will prevail, but there's not a lot of optimism. you know this and my colleagues know this, more and more people are talking about the threat. not only if you don't deal with this, you'll send the united states back in a recession, but that the global economy is teetering. they're in their political vaults and maybe blind to the political stakes. >> ken, let me share something from pimco's bill gross. the world's largest bond investor. they make informed bets on economies. here's what bill gross had to say about what's going on right now in the u.s. he said these head winds cannot be wish away as we move forward. those are things like growing debt, globalization, technology
12:04pm
and our ageing population. now, that speaks to something, ken, that i've warned about repeatly on this show. the challenges are significant. they come from europe and asia and old and failing instruction here in the united states. massive debt. americans have the right to expect their leaders to tackle large problems. what do we do? >> well, i think this point that it's not just what happens this month, this year, how with regoing to move forward? grow this economy? because this problem of debt comes from really from our ageing population. from our having to compete with the rest of the world and you know, you talk about this tax hike that we have, it's not enough to close the gap. i mean, the idea that the middle class is going to get away from this without paying most of it without entitlements being cut, that is nuts. i mean, eventually, that's going to happen. they're not going to admit it
12:05pm
now. you don't want to do that in the middle of the recession. >> diane, one of the argument that is say the fiscal cliff is overblown, the resilience of the stock market. s&p 500 is up about 12 for the year. companies have a lot of cash they're holding on to. is too much being made of the negative effect of this uncertainty? >> actually, i don't think so. i think we've seen a lot of the corporate sector has shown a lot of uncertainty and consumer sentiment fell almost entirely among the highest income households mostly because of fiscal cliff concerns. that said, i agree with ken. this is a much larger issue that nobody's really willing to talk about. we can't raise taxes enough to compensate for what we need in our demographic situation entitlements. i also think it's really
12:06pm
important to understand that not only have we seen investment decline and employment more consumer oriented and corporate orie oriented, the investment side not showing big gains. that shows delays in hiring and deferment by the cliff and i think it's real that the confidence we're at a fork in the road. we can either choose to enhance our role in the global economy by taking these situation and making responsible decisions or by deliberately slitting our own economic throats. we'll lose what little credibility we have left. >> john, you know, instilling confidence would be a big role for washington, but there isn't a great deal of confidence in washington. there's less in congress. at this point, are they sort of conscious of what could happen if they make the wrong decision or are they more interested in where they will lose their core support. democrats and republicans that play to their basis. >> it's one of the reasons the
12:07pm
president thinks they have higher ground because he just won an election and even though the republicans kept the house, democrats kept up in the senate. approval ratings are still in the tank. but they created this cliff with their short-term band-aid before and the process they have created now makes it harder to get a solution. as diane talked about the need for a big solution, everybody knows they need to do something in the short-term. if the republicans give ground on rates, their base sending a letter out to the republicans, fight, fight, fight, don't raise taxes, pressure the president. then democrats, labor unions, the aarp saying we don't need to cut medicare. touch social security. every time you have a short-term play, the special interests on both sides dig in and until they erase the trust deficit, every time they do it, they make it harder to do the big stuff. >> ken, notwithstanding the
12:08pm
problems whef outlined in this conversation and the problems coming from washington, there is some economic renaissance going on. we've got low energy prices, manufacturing input. this housing boom with more interest rating here to stay for a couple of years. is there enough that can happen in this economy to off set what's happening? >> we can't ignore them. i wish i could say that. if they blow it, there's nothing we can do, but i think the risks are becoming more balanced where things like the housing recov recovery, consumer debt coming down are start tog offer the possibility where growth might be a little stronger. although on the other hand, the europe and many things you mentioned, all these uncertainty mentioned it could be lower. we're less vulnerable than we were, but if they don't strike a
12:09pm
deal, i think they will, they may go over january 1st so the republicans can say taxes went up even though they give in on the tax hikes for the 2%. >> stay where you are. the unemployment rate is now at its lowest rate since december 2008. after baek, we'll tell you why it's not as good as it looks. okay, now here's our holiday gift list.
12:10pm
aww, not the mall. well, i'll do the shopping... if you do the shipping. shipping's a hassle. i'll go to the mall. hey. hi. y'know, holiday shipping's easy with priority mail flat rate boxes from the postal service. if it fits, it ships anywhere in the country for a low flat rate. yeah, i know. oh, you're good. [ laughing ] good luck! [ male announcer ] priority mail flat rate boxes. online pricing starts at $5.15. only from the postal service.
12:11pm
she also likes to ride her bike. she knows the potential for making or losing money can pop up anytime. that's why she trades with the leader in mobile trading. so she's always ready to take action, no matter how wily... or weird... or wonderfully the market's behaving... which isn't rocket science. it's just common sense. from td ameritrade.
12:12pm
the headlines on friday looked great. unemployment rate drops to 7.7%. 146,000 americans score new jobs, but those headlines don't tell the whole story. christine romans is here to share the breakdown of that report. >> let's go beyond the headline and look deep inside these numbers at say the unemployment rate. the underemployment rate. 41.1% of people out of work have been out of work for six months or longer. that starts to become a real big problem for the economy when these people are left behind. underemployment still high. 14.4%. some call this the real unemployment rate. it's almost double what that headline number is. another big problem. let's look in the sectors that are hiring. retail jobs. 53,000. all of those retailers hiring up for the holiday season, but many of those jobs are temporary and it's kind of hard to send a kid to college on the -- many of those retail jobs and there
12:13pm
aren't always benefits. some place where they are benefits if you look into these numbers, you can see that business and professional services, flip the screen guys, business and professional services, 43,000 of those. the government pointing out that computer systems analysts and related fields have strong demand and good pay there. every month, you're looking backward. the trend is important. two years now of jobs growth, but look at how difficult it has been to stay above 200,000 jobs per month. it gets up there one or two months, then can't quite stay up there. we need to see next year, some better jobs, durability of this for next year. >> this report was supposed to be weak. superstorm sandy, a number of labor disputes. the fiscal cliff. we were expecting the number to go up from 7.9 to 8%.
12:14pm
went down to 7.7. a number of economists, created 146,000 jobs, so before you opine on the report, how accurate and reliable do you feel this report was? >> well, first of all, i think it's important to know there were downward revisions to the past two months, which makes the trend not look as good. it's also important to note that anywhere between 50 to 100,000, which about 86,000 were affected by the storm, is not considered significant in this report. so again, you're not necessarily capturing it also on the 7.7%, that survey was taken very earlry in the month. a week earlier than the establishment survey. the household survey was take b on monday november 5th, a few days later, we had the nor'easter. the secondary storm that hit the northeast and caused insult to
12:15pm
energy injury on many and that was not captured in that unemployment survey, so i think that although they say it didn't affect it, they also don't, did have a major increase in the number of people who were affected by weather conditions. 350,000 or so, something like ten times the normal average couldn't get to work because of weather conditions. >> ken, let's assume we get over these issues, avoid the cliff. figure out what affect sandy had on this thing. we're still looking at growth in the 150,000 jobs a month range. do you see something stronger coming or are we stuck in the slow and steady crawl for a while? >> i think it should get stronger at some point over the next couple of years. if it doesn't, we're just going to stay up at this rate forever unless people just drop out of the labor force, but as christine said, you kind of want to get up to 200,000, even 2 250,000, to dig your way out of this. so i do think it will gradually
12:16pm
get better. it's still going to take several years to get back to normal, but barring shooting ourselves in the foot, barring something really bad happening out of europe, i think it will get better between now and sometime next year. >> can we talk about these people dropping out of the labor force? why? you said more than normal couldn't get to work. but why are wepeople dropping o? what are some of the factors causing them to drop out? >> well, we're seeing a couple of things happen. one is the natural demographic as people are ageing, but we're also seeing people take earlier social security than they have in the past and that's a sign of weakness. their benefits have run out and at 62, they don't think they'll be able to get a new job. also, there are some myths, when you run out of unemployment insurance, you may not look for
12:17pm
work right away. you still have to pay your bills, so some may be timing issues as well. there's a lot of cross currents, but none of them are signs of economic strength. rather than you know, the things we'd like to see going on out there. >> ken, there's some sense if the government gets out of the way, there are things going on that could create an economic renaissance. what if we don't go over the fiscal cliff, government doesn't get out of the way, but plays some role in encouraging some activity. what would you say would be the best thing for the government to put itself to in 2013 that would increase job creation and economic growth? >> i think it's infrastructure investment, that's the place where we need to do it. it's not going to kick in right away. >> sure. >> this isn't going to go away right away, so getting the infrastructure investment, that's sort of the easy thing. there are possibly other things which are trickier, like trying to improve the education system,
12:18pm
but sort of these fundamental things, what we need to work on. not just that we're growing a little faster in 2013, but for many years there after. >> christine, you make this point all the time, actually. first of all, education, the payback is good. when you look at these numbers and compare the average to those with a college degree. it's half. the unplace of employment rate is half. >> it is, but i'm terrified about the kids who haven't had a chance to get in the labor market yet. so they've got a degree, debt, they're not in the labor market yet, so they haven't been able to get into that group that has half the employment of everything else. they're having a tough time and as we know, that first job you have, that first foot on the first rung -- >> those sort, up to the age of 30 is higher. up to 11. >> that first step on the ladder is so important to your lifetime earnings, achievement. as a country, it's eati ining y if you can't figure out a good
12:19pm
edge kax, but there's an opportunity once you get into the labor market. >> thanks so much for joining us. let's see what the future holds in terms of jobs. does this man scare you? if you're a republican in congress, the answer is probably yes, but in the last three weeks, more and more lawmakers have said they are down with grover norquist and his so-called taxpayer protection pledge. i'll introduce you to two of them right after this. from the best players in history
12:20pm
to the number 1 club in the world. the potential of manchester united unlocked. nyse euronext. unlocking the world's potential. at chevy's year-end event, we have 11 vehicles that offer an epa-estimated 30 mpg highway or better. yeah? hey. hey. where's your suit? oh, it's casual friday. oh. [ male announcer ] chevy's giving more. this holiday season, get a 2013 malibu ls for around $199 per month, or get $1,000 holiday bonus cash.
12:21pm
12:22pm
get selsun blue for itchy dry scalp. strong itch-fighters target scalp itch while 5 moisturizers leave hair healthy. selsun blue. got a clue? get the blue. well, he might be the most powerful republican in washington and has not been elected to anything. 248 members of the house and 41 senators in the 112th congress have signed grover norquist's taxpayer protection pledge. a promise to never raise taxes. at one point, not signing would have been political suicide for republicans, but now, fears about the fiscal cliff and america's debt are pushing some seen here to renounce the pledge.
12:23pm
i've been highlighting members of congress who have recently said they're getting over grover. one, tom cole, says he is not bound anymore. representative cole, you wrote allowing taxes to rise for the top bracket may seem acceptable by comparison, but this path would be enormously damaging for the economy. which meant you weren't going to do it. now, you've been urging your fellow congressmen to at least extend the bush era tax cuts to those making less than $250,000 and then do battle over tax cuts for the wealthy later. what has changed your mind? >> frankly, nothing, and you've mischaracterized my position. i'm not for raising tax rates on anybody. it's going to slow down, hurt rates. that's my position. not just because i signed a pledge, because that's what i believe. what i have said is we agree with the president that taxes on 98% of the american people shouldn't go up.
12:24pm
that's his position. that's our position. why not just take that off the table right now? it's 80% of the bush tax cut. we could make it permanent. we're still free to fight another day. i think speaker boehner's put out a good position which generated the revenue, but doesn't raise rates and i would certainly support that position, but i'm not for raising rates. i don't see what i've proposed as a violation of the pledge. it's not a violation at all to take a temporary tax cut and make it permanent and still feel -- >> but that's what this whole debate is about. it's about taking the temporary tax cut. >> first of all, the whole debate's about a whole lot more than that. it's about spending cuts and entitlements. i think the we can resolve the revenue piece we can move on to where the debate should take place. but you know, again, i think if the two sides show on this area we agree, we can work together,
12:25pm
let's take it off the table. >> here's the issue. you did say let's get a deal done and members of your party came down on you for that and said no, that's not how we're going to do it. you're colleagues who said that is not the way we're going to go. >> they're certainly free to have their opinions. i'm free to have mine, but what i think people sometimes forget in this, if we don't act, tax rates go up for everybody. so the idea i'm advocating raising taxes because i'm saying let's take care of 90% right now, that's current law and then continue to fight on the others, you know, i just think that's number one, the right thing to do. you don't punish the american people. you don't use them as hostages in a negotiation and i think it's smart politic. it's good negotiating because it moves most of this debate over to the spending and entitlement debate. >> i want to bring in congressman aelect.
12:26pm
39 senators in the in coming congress which you'll be apart of have signed the pledge, you are not one of them and you say you are not going to sign. is this a principle decision and grover norquist or the fact you don't like pledges or are you planning to support a tax hike on the top 2%? >> i didn't sign because number one, you know, the pledge i've made is i've made a pledge to my country to pledge allegiance to america, my wife. we've got a spending problem in this country and i think there's better ways that we can deal with that. >> i want to go back to congressman cole for a second. i'd like to take every opportunity i can to remind americans about what this pledge is. i've got the norquist pledge here. it's the congressional version of it. i pledge to the taxpayers of blank district of the state of blank and to the american people that i will one oppose any and all efforts to increase the
12:27pm
march rate rate -- unless match ed dollar for dollar by further reducing tax rates. want to hit on something you said earlier, that it is current law if we do nothing, the bush tax cuts expire and rates go up. is that fancy footwork to get out of the fact that you signed this pledge? rates will go up. >> i'll let grover speak for himself. there's nothing in that pledge that says i can make a temporary tax cut permanent. i can't. now, i'm going to try and make as much of this tax cut permanent, get such spending cuts as i can, but i'm not voting to raise taxes and never advocating that we should. i think it's a mistake. it's a spending problem, an entitlement reform problem and we're going to have revenue on the table whether wipt or not.
12:28pm
i don't think if i allowed tax rates to go up on 98% of the american people when i could stop it, how would letting taxes go up be a violation, be keeping the pledge and taking most of them off the table and making those a violation? that's just inconsistent. one other item here, too, the payroll tax. nobody seems to be talking about that. >> yep. >> if the pledge applies to one, it applies to the other becse they're both temporary measures. >> it would be much easier, sir, if we didn't have all these temperature measures or pledges. have you ever spoken to grover norquist? >> yes, i have and i conveyed my feelings and he seemed to be okay with that. again, i agree with congressman cole. we need to get the economy growing to increase that revenue and i just want to remind you, too, i'm not a member of
12:29pm
congress yet. i won't be sworn in until january 3rd, then after that point, i'll get sworn out, i'm sure. >> you're a lucky guy for the next 30 days. enjoy it. >> thanks very much for joining us. we appreciate i. representative tom cole from oklahoma and congressman elect ted yoho from florida. coming up, low taxes have been an article of faith among republicans for decades, but is the gop willing to take us over the cliff just to avoid a small marginal increase for the top 2%? we'll delve into the math, next. to test the 2.0-liter turbo engine. [ engine revs ] ♪ [ derek ] 272 horsepower. the lightest in its class. the cadillac ats outmatches the bmw 3 series. i cannot believe i have ended the day not scraping some red paint off on these barriers. ♪ [ male announcer ] the all-new cadillac ats. a regular guy with an irregular heartbeat.
12:30pm
the usual, bob? not today. [ male announcer ] bob has afib: atrial fibrillation not caused by a heart valve problem, a condition that puts him at greater risk for a stroke. [ gps ] turn left. i don't think so. [ male announcer ] for years, bob took warfarin, and made a monthly trip to the clinic to get his blood tested. but not anymore. bob's doctor recommended a different option: once-a-day xarelto®. xarelto® is the first and only once-a-day prescription blood thinner for patients with afib not caused by a heart valve problem, that doesn't require routine blood monitoring. like warfarin, xarelto® is proven effective to reduce the risk of an afib-related stroke. there is limited data on how these drugs compare when warfarin is well managed. no routine blood monitoring means bob can spend his extra time however he likes. new zealand! xarelto® is just one pill a day, taken with the evening meal. and with no dietary restrictions, bob can eat the healthy foods he likes.
12:31pm
do not stop taking xarelto® rivaroxaban without talking to the doctor who prescribes it for you. stopping may increase your risk of having a stroke. get medical help right away if you develop any signs or symptoms of bleeding, like unusual bruising or tingling. you may have a higher risk of bleeding if you take xarelto® with aspirin products, nsaids or blood thinners. talk to your doctor before taking xarelto® if you currently have abnormal bleeding. xarelto® can cause bleeding, which can be serious, and rarely may lead to death. you are likely to bruise more easily on xarelto®, and it may take longer for bleeding to stop. tell your doctors you are taking xarelto® before any planned medical or dental procedures. before starting xarelto®, tell your doctor about any conditions, such as kidney, liver or bleeding problems. ready to change your routine? ask your doctor about once-a-day xarelto®. for more information including cost support options, call 1-888-xarelto or visit goxarelto.com.
12:32pm
this changes so frequently, but the last time i checked, b republican counterproposal and the negotiations still includes bush era tax cuts staying in place. president obama has called that a nonstart e. so, what happens if we do raise taxes a little bit? rates will still be much lower than what americans paid just a generation ago. in 1980, americans paid 70% of
12:33pm
their income to uncle sam. tax reform under reagan reduced that to 50% in 1981 and closer to current levels in 1986. president obama wants the tax cuts to expire for the wealthy only, kicking up their rate to 39.6%. a 4.6% uptick for households making more than $250,000 a year only on every dollar they make above $250,000, it's why it's called the marginal tax rate. only on the money you make on the margin. steven moore is ready to jump out of his skin after i just said what i said. david k. johnson is a pulitzer prize winning journalist. his latest big, how big companies use plain english to rob you blind. steven, while i agree that every
12:34pm
penny counts when it comes to your own money, when you compare the taxes most americans paid out in past decades, i don't get why republicans are screaming bloody murder about this. what would be so bad with the wealthest chipping in just a little bit more? >> when you showed that chart of the tax rates and that was exactly accurate. we had 70% rates in the 1970s. by the way, that didn't turn out so well, then we cut the rates significantly. 50%, then 28 and then the rates went up to 35%. but i would love to see you super impose on that chart. the share of taxes paid by the rich. here is the interesting thing. if you put the share paid by the rich, as the share came down, the share paid by the rich went up to almost 40% today. >> doesn't that just mean there are more rich people or that they make more money?
12:35pm
>> yep and that's what we need. rich people may a lot of the taxes. one of the reasons the deficit went down in the 1990s was that you had a big increase in the number of people making money and they paid more tax. there's nothing wrong with getting rich in this country. the problem we've had in the last four years, the number of people who declared million dollar filers has fallen by about a third. so you're just not getting the revenue. i do not believe you're going to grow in economy by putting more taxes on people who invest and what's what most do. so i worry that it's going to suppress growth starting in the first quarter of next year. >> here's the distinction. is it going to, are we really going to grow the economy more by increasing those taxes? are we going to suppress growth, maybe not have as much growth or hurt the economy? the rhetoric on capitol hill is that you are going to hurt the
12:36pm
economy if you raise marginal tax rates. >> the imperical evidence amere tax cuts. it's fallen back to the level of 1966, 1967. the top 1% of the top 1% however have seen their income go from 4 million a year to $22 million a year. and the reason for this i believe is our tax system. it is redistributing upward, it is not investing in our economy. we are heading toward a third world state with our infrastructure, our roads are falling apart. our bridges. our dams are putting lives in danger because we're not investing in the future. the other modern countries of the world are investing in education for young people. we're pulling back. why? some believe the real problem is that we don't have enough rich people and money, i would argue the real problem is we're not
12:37pm
investing enough in the future entrepreneurs, scientists. >> you said in last week's show that you think republicans should be all about education. but not spending. on education. >> well, look, i want to challenge some of those numbers that david just mentioned. if you look at what's happened to infrastructure spending in this country over the last ten years, it's gone through the roof. i live in virginia. we're building this absurd rail project out to dulles airport, one of the most expensive projects in american history. maybe the biggest boondoggle ever. same on education. >> not five like the europeans or nine like the chinese. >> explain this. how is it that in real dollar, intend tice as much per student in the public schools today as we did in the 1960s and yet the test scores are falling? there is no relationship between how much we spend and the results we're getting. >> i'm talking about higher
12:38pm
education, i wouldn't dispute with you about someone who teaches at syracuse law school that we need to improve students performance tremendously, but more importantly, we're not investing in higher education. we're spending half as much on the europeans on instruction. today, i spent $100 paying the pothole tax to get my car realigned once again because of potholes. >> i get so frustrated, you know, week after week, ali, you and others say we need more infrastructure. what about private investment? you look at the gdp numbers, what's really fallen off the cliff has been business spending. >> public, private stuff, right? that does work in other countries. would you object to the government having any role in an infrastructure build in this country? >> if you want more infrastructure, you can get about 20 to 25% more roads and
12:39pm
bridges and repairs. all we have to do is get the davis bacon act. union wages on these projects that inflate the costs. >> so, you want to drive down wages, that's what you want to do is drive down wages. >> i want to get -- for their money. look, what i'm saying is i don't 5, 10% of these infrastructure dollars going into the coffers of the labor bosses. >> it is a really interesting discussion, doesn't answer the question i had in the beginning, which is will we really do a bad thing, as distasteful as it may seem to you, stephen, will it be a bad thing for the economy? >> i'm going to answer your question with a question. say that the republicans and i think at the end of the day, they probably will give bill clinton, barack obama his tax increase on the rich, but you know what? we go into 2013 with still a
12:40pm
trillion dollar deficit and the question i ask you two and president obama if he were on the show, what's act two? what do we do next? >> you do agree with stephen on one thing and that is that there is some work to be done on inefficient spending? >> the best funding program we have in the government is social security. health care. for every dollar, the other three modern countries spend per capita in other dollar, we spend $2.64 and still have 50 million people without insurance. if we could get france's health care system, widely regarded as the best in the world, we could eliminate 40% of income taxes and still have the same deficit. if you look at the federal budget numbers, the budget is coming way down. the economy is improving. higher tacks allow us to create jobs where people are investing
12:41pm
in things that make commerce work better. all private wealth is built on a foundation of commonwealth. if we replace foundations of granite and sound and that's where steve's ideas lead to, then our superstucktures will have to collapse. >> david, what i'm hearing from you is three words. tax and spend. >> we're going to have to have a rematch here. we're out of time and we don't want to not pay our bills, so i have to take a break. what a great conversation though. thanks for both of you bringing my viewers some really great ideas. i have been warning you about this fiscal cliff for months now. i call it the economic storm of our own making, but some of you think all the talk is overblown. will a failure by washington really mean catastrophe for the economy? i'm going to debate with richard quest, next. [ roasting firewood ]
12:42pm
♪ many hot dogs are within you. try pepto-bismol to-go, it's the power of pepto, but it fits in your pocket. now tell the world daniel... of pepto-bismol to-go.
12:43pm
12:44pm
12:45pm
time now for q and a. three weeks left to do a deal and yet, lawmakers in washington -- promising to cut trillions, but republicans insist it could be done without raising taxes on the rich. president obama insists at a nonstarter. what happens if there's no deal? are we as some argue, maybing too much of the fiscal cliff deadline? would it really be a catastrophe to hit it, go over it, maybe for a little while. joining me now from london, richard quest, the host of quest means business on cnn international. i got 60 seconds. i'll go first. could be catastrophic if
12:46pm
congress doesn't get a deal by january 1st, the government will try to soften the blow of spending cuts and tax increases. they could delay the with holdings that people pay or they could tell agencies to accelerate the spending at the new year to mitigate the cuts that are coming, but all of that assumes that congress will actually do something. otherwise, it could be catastrophic. i say don't count on it. if a deal can't be cut in the next three weeks, why assume they'll cut one in january? this is a lame duck congress. they're waiting for a new congress to be sworn in. think back to the debt ceiling when nothing got done. think back to the discussions about t.a.r.p. the bottom line is i am not convinced they will do the things to avoid the catastrophc. congress' inability to ever see the dangers and avoid them is
12:47pm
richard. you seem bored with by my answer. >> all right. so, you want to play hardball. you want to play hardball. with international economics. and see just what might happen. of course nothing will happen on january the 1st, the moment the fiscal cliff arrives. it's going to be a slow drip, drip, drip effect as people realize that slowing and spending, taxes go up. consumers are worried. it won't happen overnight. there's going to be no dramatic over the cliff we go. instead, you will see an evaporation of confidence. you will see an evaporation of business decision making and that is where the tumor and the cancer will begin. in the united kingdom, we've just had higher borrowing
12:48pm
numbers and lower growth forecast. just last week, the ecb came out wi with dreadful, dreadful numbers on how the euro zone is performing and you want to play games with something as important as the u.s. budget. i'm going to finish here. the core worry is three weeks out and an inability to do a deal. >> so, it mabt come january 2nd or 30th, the catastrophe is long-term because of the erosion of confidence in the united states. >> it's happening -- it's happening now. >> we see it anytime jobs numbers. >> once you and i -- while you and i are enjoying our weekend, it is happening. >> were agreed. richard quest, make you catch him when you're on the road. trucks like these transport everything from food to washing machines to the ear muffs that you ordered online today. with the coast of diesel rising,
12:49pm
americans are looking elsewhere for their fuel. i'm going to tell you where they're look iing right after this. ♪ ♪ ♪ [ male announcer ] everyone deserves the gift of all day pain relief. this season, discover aleve. all day pain relief with just two pills. since ameriprise financial was founded back in 1894, they've been committed to putting clients first. helping generations through tough times. good times. never taking a bailout. there when you need them.
12:50pm
helping millions of americans over the centuries. the strength of a global financial leader. the heart of a one-to-one relationship. together for your future. ♪
12:51pm
12:52pm
america's in the middle of an energy boom. the u.s. has become the so-called saudi arabia of natural gas, production has soared 56% the price of natural gas has come down, it costs more than half of what it did five years ago. 99% of it went to residential, congre condition assumer use. u.s. trucking firms are looking to push that number higher, why? why does anyone do anything? cost. while we have seen strides in battery -- diesel is costly, prices have dropped down to $2 a gallon back in 2009, but they have doubled since then. a gallon of diesel costs $1.50
12:53pm
and that means the price of a natural gas powered truck can be paid off in a couple of years. >> diesel is king. here at the flying j. truck stop near richard mondmond, virginia. daniel keating has pushed his rig 3.5 million miles. but truckers here don't have to look far to see the future. alone in a corner sits a new liquefied natural gas island. lng as it's called is cheaper, cleaner and supporters say more plentiful than diesel. but there's a problem. say you want too drive a truck like this coast to coast using liquid natural gas. these are the only lng fueling stops across the country and there's actual only 3 of them. a tank of lng would take you
12:54pm
about 700 miles, so going westward from washington, d.c., unless you go completely out of your way, you would run out of gas just outside of nashville. >> it's what the industry calls the chicken and egg dilemma. what comes first? new trucks or new pumpses? the american trucking association recently held a sold out summit about just that. >> it's going to happen, i promise you it's going to happen. >> reporter: texas oil man turned natural gas crusader, t. boon pickens, says henry ford faced the problem. >> if someone said, henry, if you thought bit, you don't have any filling stations. oh, gosh, i never thought about that, i'll forget this idea. that's not what he said, don't worry about it, you'll get filling stations, if the car shows up the filling stations will come. >> reporter: the number of lng stations will skyrocket to 1 a 50. you would think environmental iszs would be thrilled at the
12:55pm
prospect of replacing dirty diesel with clean natural the gas. not quite. >> we think a rush to liquefied natural gas is a mistake. >> reporter: while natural gas may burn cleaner, problems arise with gas laebs. >> the leak of that gas itself is such a potent greenhouse gas, 70 miles for potent than carbon dioxide, that undermines the natural gas advantage. >> i can't get wheel work in the end. >> reporter: just a matter of time? >> a matter of time. don't be looking for liquefied natural gas powered cars any time soon. automakers are starting to develop cars that run on come pressed natural gas cng, but with just 536 public cng filling stations across the country, the u.s. is still years away from powering its cars using natural gas. natural gas is just one of the
12:56pm
things that could make 2013 a great year for the u.s. economy. is the doom and gloom surrounding the fiscal cliff actually obscuring an economic resurgence? nited unlocked. nyse euronext. unlocking the world's potential. at the chevy year-end event because chevy's giving more. more efficiency with sonic and cruze... more function in equinox and traverse... more dependability with the legendary silverado... and more style in the all-new malibu. chevy's giving more at the year-end event because 'tis the season. chevy's giving more. this holiday season, get a 2013 cruze ls for around $169 per month or get $500 holiday bonus cash.
12:57pm
12:58pm
12:59pm
a positive jobs report on friday serves as another reminder that the fiscal cliff may be obscuring the fact that america may be poised for an economic renaissance, jobs are being created, consumer debt is shrinking, goldman-sachs said in spite of -- forget silver linings, housing's been the golden lining around the economic dark cloud. home afforli